Knife To A Gun Fight

Knife To A Gun Fight
July 2, 2010

It’s no secret that for-profit institutions lavishly outspend their public counterparts in marketing. Just look out for their billboards along busy roadways, commercials airing on cable television, or prominent ads on popular websites.

This tends to cause general consternation among community college leaders, many of whom believe their institutions could just as easily serve students looking elsewhere for career advancement or retraining. So why – amid ever-increasing advertising blitzes by for-profit institutions – are some community colleges slashing their marketing budgets?

Officials at Brevard Community College, located along Florida’s Space Coast, say they don’t need any help attracting students, noting that the poor economy has done more than enough to boost the college’s enrollment – which has grown by a third in the past three years, to nearly 25,000. And now that NASA’s space shuttle program is being shuttered, the college expects to play a role in retraining most of the 9,000 local residents who will lose their jobs at the Kennedy Space Center.

With such a dramatic increase in its student population, Brevard cut its advertising budget by 62 percent – from $675,000 to $260,000 – this fiscal year. Among the changes, the college will take down six billboards, which cost about $60,000, and will stop running radio advertisements, which cost about $230,000. The college will, however, continue to advertise on television, using spots produced by its PBS station.

“We just really don’t believe it’s necessary to advertise at the levels we did in previous years,” says Kate Junco, college spokeswoman. “People know we’re here. We’ve pretty much saturated the market with ads. Now, we’re just doing smarter advertising with fewer dollars.”

Smarter spending at Brevard means reaching out to new demographics. Now that space limitations at Florida’s four-year institutions have increased interest in the transfer function of community colleges like Brevard, Junco explains, her institution no longer needs to court traditional-age students.

“Over the past three years, all the images in our marketing materials depicted high school students and were directed toward them,” Junco says. “Now, we’re shifting gears and going after parents and middle-aged people who need to go back to school. When we go out and give talks to the community, a lot of the unemployed don’t know we have workforce development programs for nontraditional students. They simply see us a transfer institution.”

Given the constraints on the college’s budget, Brevard officials believe there are better ways to spend the $415,000 they are saving on advertising. Junco notes that the college’s president has pledged to spend the money to increase the number of full-time faculty members.

As for the for-profit institutions that may capture the attention of students who might otherwise be intrigued by the college, Junco says Brevard is not worried about losing any ground.

“Keiser University is in the area, but they primarily serve graduate students here so they’re not big competition,” Junco explains. “Of course, you have [the University of] Phoenix and Kaplan [University] online, but that’s not something we’re concerned with at the moment. We have a very strong reputation here in the county, and we’re boosting a lot of our online offerings.”

Further south along the Florida coast, Miami Dade College has also significantly trimmed its advertising budget for many of the same reasons as Brevard: namely, it can do so and still attract students. The college is recognized as one of the largest two-year institutions in the country.

Juan Mendiata, college spokesman, notes that the institution has reduced its enrollment advertising 71 percent since 2008. Though it spends more to advertise cultural events and other nonacademic programs, the college used to spend around $200,000 annually on enrollment advertising. Now, after the cuts, the college spends a mere $58,000 annually. Still, Mendiata explains that the college’s advertising budget “has never been huge,” noting that college officials have always been proactive about pushing enrollment on talk and public affairs shows on local radio and television.

Though Miami Dade officials say they do not view for-profit institutions – of which there are many in South Florida – as their competition, they acknowledge that they serve many students who come to the community college after an ill-fated run at a proprietary institution.

“The concern we have is for the student,” says Victoria Hernandez, director of government affairs at the college. “Students come to us, many times, having been burned by a for-profit that misled them in some way. It’s not troubling institution to institution.”

In New York City, Gail Mellow, president of LaGuardia Community College, takes a much harder stance on for-profit institutions and their ability to out-market community colleges.

LaGuardia spends around $140,000, or less than 2 percent, of its annual operating budget on advertising. By comparison, the Apollo Group, which owns the University of Phoenix, spent about $263 million, or nearly 25 percent of its $1 billion net revenue, on “selling and promotion” expenses last quarter alone, according to the company’s latest reports to the Securities and Exchanges Commission.

“It’s very deeply troubling because of what it means about the focus on education,” Mellow says. “We’re spending pennies compared to their millions. The biggest question is, why are they spending so much money on advertising? If they have a terrific product – which community colleges do – they wouldn’t need to advertise so much. It brings up the issue of quality.”

Like most community colleges in this economy, LaGuardia doesn’t need to advertise to attract students. They’re lining up whether or not they’ve seen one of the college’s newspaper spreads. In May, for example, the City University of New York announced that, for the first time ever, it is putting first-time freshman applicants for its six community colleges on waitlists because of a space shortage.

In that sense, Mellow believes there are better ways to spend the money that could go to marketing.

“I’m not going to change my spending habits because of what the for-profits can do,” Mellow says. “There’s no way I can compete with them, nor would I want to. I’m extremely bothered by it, but I don’t want to get caught in the game. If I had an extra million dollars or two, I would spend it on full-time faculty.”

Though Mellow has no plans to change her advertising habits, she hopes to change those of the for-profit institutions. In particular, she takes issue with how much federal and state money for-profit colleges receive in the form of student aid and then go on to spend on expenses like advertising. For example, Steve Eisman, the Wall Street trader featured in Michael Lewis's The Big Short, noted in a May speech that “federal Title IV loan and grant dollars now make up close to 90 percent of total revenues” at “many major for-profit institutions.”

“I don’t have a problem with people accessing public dollars, but let’s have a level playing field,” says Mellow, referencing some of the checks on for-profit institutions that are being discussed in Washington now.

Officials from the University of Phoenix refused to break out their marketing spending any further than required of them by the government. Still, they say that they view community colleges as “partners” and not competitors.

“Our goal with respect to marketing is simple: to ensure that anyone who wants a quality higher education – and is willing to work hard to get one – knows that University of Phoenix is an option,” writes Phoenix spokesman Manny Rivera. “All of our marketing efforts are oriented towards accomplishing our mission, and to helping current and prospective students achieve their goals.”

Thomas Bailey, director of the Community College Research Center at Columbia University Teachers College, says it is possible that colleges may lose some enrollment to for-profit institutions when the economy turns around, depending on how they market themselves. For example, community colleges that feel they no longer have to market themselves to traditional-age students may lose them in the future when enrollment trends change.

Bailey argues that community colleges do not need to market themselves in traditional ways for brand recognition, noting that most people know their local community college exists. Instead, he believes community colleges should do more to ensure that potential students who know of them fully understand what they do and what they have to offer.

“Community colleges don’t need to recruit students,” Bailey says. “They have more than enough. It’s so easy for community colleges to get students to come that they often don’t provide much information about the college. If you take my broader view of marketing – providing information and guidance to students to know what’s right for them – that needs to be done right now.”

Marketing experts offer another view. Many of them say it is a major mistake for community colleges to cut back on marketing just because students are flooding through their doors.

Carl J. Sefl, founder of ROI Marketing Services and former executive director of marketing and admissions services at Kirkwood Community College, in Iowa, advises a number of two-year colleges across the Midwest. Though it is a hard sell to some clients, he strongly urges community colleges to not cut back on their marketing.

“If you’re in business for the long term – which I presume all community colleges are – then you need to continue an investment in good marketing,” Sefl argues. “You shouldn’t let up marketing efforts. You should be maintaining or increasing them, because what you’re seeing with enrollments right now is artificial. It’s a bubble. If you’re not on the mind of key audiences … then there will be consequences that you just don’t even know about.”

Among the potential downsides to letting up on marketing, Sefl explains, is losing ground to for-profit institutions. He maintains that those college administrators who conflate marketing and advertising are more apt to trim both. But, he says he is determined to change minds.

“If you envision marketing as just advertising and your budget gets whacked, then are you going to cut $50,000 from the ad budget or fire an adjunct faculty in English?” Sefl asks. “You’re going to dock the ‘cost’ of advertising. But, if you perceive advertising as an investment, you still may lack the budget, but you’ll think long and hard before making that decision.”



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